SPX 7200 Reached! Now What? May 1 Stock Market Preview
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Tonight’s YouTube video covers SPX, the VIX, BTC, IBIT, MSFT, HOOD, and more, so check it out if you have a few short minutes! You can view this video and our library of previous videos by clicking Community at the top of our homepage to find our YouTube channel link.
Using actual eyeballs and my quasi-intelligence (as opposed to “artificial intelligence”), I went back to 1976 onward on my chart to see if I could find one exception of SPX’s price moving higher when the HMA has crossed over price and also over the top Keltner channel. While I will admit it’s possible I might have made a mistake, I don’t see a single instance where price continued higher with such accompanying conditions without several days of sideways and/or downward movement. Not a single one.
And here we are, barely one “real” down day since March 30, and we’ve reached the 7200 GEX target that has been advertised as likely by May 1st for the last week or longer, even surpassing that level, just to test the HMA from below.
Excluding 0 DTE GEX and volume, option activity was mostly at lower strikes again today, though we see the GEX picture holding firm with an upward bias.
This is where the GEX expirations can be helpful: While some notable GEX exists at 7300-7350 expiring May 15, most of the GEX at 7400+ expires in June. My conclusion is that while it’s possible SPX has the most boring and shallow of corrections sideways for a few days, then continues higher, there’s enough time between now and those expirations for a deeper pullback to occur before resuming a climb.
QQQ tells much of the same story: A steep intraday climb to approach the HMA from below, which is quite some distance above the upper Keltner channel.
My expectation and speculation is that any spike above 670 will likely fade, with the upper Dealer Cluster zone just overhead at 675.
QQQ needs below 657 (roughly 2% lower) to potentially open the door for more momentum toward 620-640, so bulls are still in control and bears need to prove themselves. How good are you at catching salmon swimming upstream? Show me!
SMH has been a rocketship alongside QQQ, dragging out all of the old grandpa semis like TXN, AVGO, and INTC to assist with the relay race. I think I spotted J Huang with a brand new jacket, if you can believe that. It’s shiny and black (I know, surprising).
Volume is particularly heavy at lower strikes for SMH, and GEX is fairly evenly distributed between 400-550.
Two things catch my eye: SMH has not made a new high compared to 4 days ago (a negative divergence). SMH closed below the HMA, with the intraday high .76 below the HMA. SMH losing 489 opens the door to a possible trip to 450.
IWM option traders (I’ll call them “Blue Horseshoe” tonight) loved 260, just below the lower Dealer Cluster zone, an area where we assume dealers might become buyers.
IWM didn’t quite reach 280, so I think there’s a good chance IWM gets through the HMA, if only briefly, reaching 280 and maybe 285 before turning lower.
If we’re lucky, maybe IWM will tip us off to upcoming weakness for the rest of the market, but today was not that day. Reaching important resistance points certainly gives reason to keep our eyes peeled, though.
The VIX 2-hour chart doesn’t look that bullish for volatility, but from a contrarian perspective, the %B (20,2) once again riding the 0.00 line and the VIX sub-17 heading toward 16 might just be reason enough for a VIX spike. Something akin to the saying “the cure for low prices is low prices.”
I underlined most recent instances of the %B indicator reaching 0.00 to show that a VIX spike (even a small one) typically does materialize from such low points. At this time, a move higher for the VIX toward 18-20 might be about “it,” barring an unforeseen catalyst for higher VIX levels.
We invite you to join us in our discussion in Discord tomorrow, where we’ll share what we’re seeing with the 0 DTE picture after the open!
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